In most general protections claims under the Fair Work Act 2009 (Cth), dismissed employees will seek reinstatement and/or compensation. Ordinarily, the Court will only order reinstatement if the employee is successful at the final hearing. However, a recent Federal Court decision (CFMEU v Anglo Coal (Capcoal Management) Pty Ltd [2016] FCA 1582) provides a rare example of an employee achieving reinstatement at the start when making a general protections claim.
What was the case about?
The case was brought by the CFMEU and two employees at Capcoal Management who had been dismissed after their positions were made redundant.
The redundancies affected 47 employees, 33 of which were CFMEU members, and occurred after a period of industrial action as part of an ongoing bargaining dispute for a new enterprise agreement. The reason for the redundancies was initially described to affected employees as “unplanned delays” to Capcoal Management’s mining operations. A manager later conceded that the delays were due to the industrial action affecting the operations.
The CFMEU, together with the two employees, alleged that the redundancies were in contravention of the Fair Work Act 2009 (Cth) because the decision to make those two employees redundant was made because the employees:
- had taken protected industrial action; and
- were CFMEU members.
On that basis, they sought an interim order for reinstatement pending the outcome of their claims.
Why was an injunction granted?
The Court accepted that it has the power to grant such an order. As is usual when considering a request for an injunction, the Court noted it needed to be satisfied that the employees had an arguable case, and that the balance of convenience favoured an injunction being granted (rather than the employees waiting for their claims to be determined).
While Capcoal Management denied that it had contravened the Act, it did not dispute that the employees had an arguable case. This is not surprising given that the Act effectively presumes that there was a contravention of the Act unless Capcoal Management could establish that it did not dismiss the employees for being union members (or for taking protected industrial action).
In considering whether the balance of convenience favoured an injunction, or whether the Court should allow the dismissals to remain in effect pending the resolution of the employee’s claims, the Court identified a number of factors that did not support an injunction.
These included that:
- the employees had not been working for weeks due to the industrial action. They also both indicated that, if reinstated, they would continue participating in the industrial action. This meant they would not be engaging in paid work even if they were reinstated, at least until the bargaining dispute was resolved;
- the employees were receiving $1,000 weekly payments from the CFMEU following their dismissal; and
- the employees had received significant redundancy payments ($52,259.90 and $89,457.99 respectively), meaning that they were not financially worse off pending a resolution of their claims.
However, ultimately the Court was mindful of the employees’ interest in continuing to participate in the ongoing industrial action. If they were required to wait for reinstatement until their claims were decided, they would have lost the benefit of that right to take industrial action now to assist with the ongoing bargaining process for a new enterprise agreement with Capcoal Management. In the Court’s view, that loss could not be compensated by damages later on and, accordingly, an injunction was appropriate.
While not mentioned in the Court’s judgment, the fact that the employees were made redundant, and were therefore not being accused of misconduct or poor performance, likely made it easier for the Court to decide an injunction was an appropriate remedy.
What are the lessons for employers?
In practice, dismissed employees are rarely willing to incur the cost of seeking an injunction restraining their employer from proceeding with a dismissal allegedly in contravention of the Act, or an order reinstating them pending the outcome of a claim. However, in a case such as this where the employees are represented by a union willing to bear the cost of the application, an injunction application is a real possibility.
Employers should always act on the assumption that a decision to dismiss an employee can and will be challenged. Decisions must therefore be:
- lawful;
- based on clear reasoning; and
- communicated clearly and appropriately.
As this case demonstrates, you must take care to ensure that redundancy decisions are not associated with any workplace rights exercised by affected employees. In principal, an employer can lawfully make an employee redundant if industrial action has put the business in a position where it no longer has an operational requirement for the employee’s role. However, the need for the redundancy should be based on an objective consequence of the industrial action, and merely not the action itself. The communications around that decision must also be drafted carefully to make it clear that the employee is not being punished for their participation in the action.
If you would like advice about ensuring appropriate redundancy and dismissal processes at your workplace, please contact the Workplace Relations, Employment and Safety team.
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